Interview: US to push free trade in Middle East
Al Bawaba 31-01-2008
interview: us to push free trade in middle east
Carlos M. Gutierrez, the influential and persuasive US Secretary of Commerce plans to use a keynote business conference in Jordan to press home the ambition of the Bush administration to see the establishment of a regional US-Middle East Free Trade Area by the deadline of 2013.
Gutierrez, who will deliver the centrepiece speech, told Noozz in an exclusive interview: “President Bush’s recent successful trip to the region has given my own mission to boost our free trade ties there extra clout and credibility. We still have every intention of creating such a zone, with Oman the latest Arab state with which an FTA is due to go completely on stream.
“There are only one or two small areas to be tied up and I expect the Omani FTA to be fully in operation very soon.”
The US-Middle East and North Africa Trade and Investment Conference will be held on the shores of the Dead Sea in Jordan (the lowest point on earth) on February 10-11, having been postponed in order that Bush’s historic eight day regional visit could take place first, and drive home the crucial free trade message that the Americans are so anxious to promote throughout the turbulent Middle East area.
Speaking in his Washington office, the Cuban-born Gutierrez, 54, who learned his English from a bell-hop in a Miami hotel, and has impressed political friends and foes alike since his promotion in 2004 from CEO of Kellogg Company, the cereal giant, told me: “The purpose of the conference is to build on President Bush’s visit, when he highlighted the value of continued economic liberalisation to create jobs, prosperity and hope for the people of the region.”
The man once selected by Fortune magazine as one of the most powerful Hispanic-Americans in business, who has risen to become the 35th US Commerce Secretary after a career which began driving a Kellogg’s lorry selling Zucaritas (Frosted Flakes) to small-town grocery stores, added in explanation of his own passionate belief in the merits of open trade ties: “Promoting open markets and furthering economic reforms will boost jobs and opportunity throughout the region.”
Gutierrez, one of the most approachable figures in the Bush cabinet, and one of the most liked among both the political and business community because of his popular touch, worked for Kellogg in Canada, Mexico, the US and Australia.
He stressed that expanding economic liberalisation in the Arab world would also have the result of “backing efforts to expand transparency, the rule of law and other political reforms.”
Gutierrez claimed that the free trade cause had been boosted by the recent bi-partisan US economic package designed to enhance confidence in the wake of the market turmoil that rocked the world - largely because of troubles in the US sub-prime mortgage market.
The conference, organised by the formidable triumvirate of the Business Council for International Understanding (BCIU), the US Department of Commerce and the US-Jordan Business Alliance, will be something of a regional Davos, if on a smaller scale, attended by economic movers and shakers from across the region, plus top foreign and US government representatives.
Gutierrez, who succeeded Donald Evans in his cabinet post, is already familiar with the financial and political situation in the Middle East, having made a well-regarded trip in 2006, during which he argued forcefully that the world’s main oil producer - Saudi Arabia - could attract more investment to strengthen and diversify its economy by relaxing equity caps on foreign business ownership.
He said then, and still believes firmly, that even though the oil sector will continue to play a key role in the Saudi economy, growth in the desert kingdom- where the US sells $2bn worth of automobiles annually- would be more stable if the government in Riyadh could diversify markets to create more employment opportunities outside the dominant oil sector.
According to Gutierrez, son of a pineapple merchant who fled Havana to Florida with his family in 1960 soon after Fidel Castro seized power, the venue of Jordan is ideal because it graphically demonstrates the success of the US-Jordan FTA, the first between America and an Arab state (one had been signed with Israel in 1995), which was agreed in October, 2000, and entered into force in December, 2001.
“It is an incredibly good example of the value of such as agreement,” Gutierrez said. “In the years since it came into being, two-way goods trade between us has increased from about $568m (12 months of 2001) to $2.04bn in the first 11 months of 2007.
“The agreement provides for more open markets in services such as telecommunications, construction, finance, health and transportation, as well as strict enforcement and protection of intellectual property rights. Jordan’s annual real GDP growth was 5.3% in 2001, and continued to grow at an estimated 6.0% in 2007, growing at 36.2% from 2001 to 2007.”
Inevitably the soaring price of oil will play a key part in both the public speech and private meetings with regional players that Gutierrez will hold during the Jordan conference, which will be held under heavy security at the luxury Kempinski Hotel, regarded as one of the jewels in the crown of Jordan’s growing tourist industry.
“The conference is an important opportunity to exchange ideas on ways to further our bilateral and commercial ties, as well as to build trust and understanding,” the US Commerce Secretary said. “Our private sector representatives will be able to explore business opportunities in the area, and enhance two-way trade and investment trends in the region.”
He claimed that as well as trade being “a win-win for the United States and Jordan,” the Gulf and North African States are among the fastest growing economies in the world, thanks to rapidly diversifying economies, liberalised trade and economic policies, and higher global energy prices.
“Extra wealth from the booming Gulf economies is having a major impact on equity markets abroad, as Gulf investors are more and more interested in Europe, Asia and the US.”
In addition to Israel, Jordan, Bahrain and Oman, the only other country in the Middle East and North Africa to have so far negotiated an FTA with the US is Morocco. Gutierrez was unable to predict whether any others would succeed in doing so in the few remaining months of the Bush Administration - despite its obvious enthusiasm for the scheme.
Christopher Walker is former Middle East Correspondent for The Times and a commentator for Sky News
